Pushing For Mid-Tier Asian Millionaires, UBS Breaks Ranks

05/04/2017

With the aim of grabbing a bigger share of the fast-growing mid-tier millionaire segment in Asia-Pacific, UBS Group AG plans to hire about 100 wealth management client advisors over the next two years in Hong Kong, the biggest wealth hub in the region.

While some global banks including Standard Chartered, are raising the threshold for their private banking clients amid growing competition from regional players, the Swiss bank's sharpening focus on the middle of the wealth market comes amidst such efforts.

"For us, the sweet spot is high-net-worth clients with investable assets of between $2 million and $50 million," Jean-Claude Humair, regional market manager for Hong Kong at UBS, a bank known for its billionaire client list, said.

"We see tremendous untapped opportunity in the entrepreneurs segment in Hong Kong," he said. "The plan is to hire 50 client advisors in Hong Kong every year for the next two years to cater for these HNWIs (high-net-worth individuals)."

According to industry tracker Asian Private Banker, UBS is the largest private bank in Asia with $286 billion worth of client assets as of end 2016 and about 1,100 client advisers, followed by Citigroup and Credit Suisse Group.

At the Swiss bank in Asia-Pacific, which has emerged as a key battleground for global wealth managers, a rebound in markets trading generated record wealth management revenues and profit before tax during the first quarter.

According to data from Capgemini, Asia is the fastest-growing wealth region globally with more than five million people boasting at least $1 million in liquid assets.

The bank classifies the ultra-high-net worth segment as composed of individuals with more than $50 million in investable surplus and because the mid-segment is growing faster than the top-tier, UBS is shifting focus to this segment.

UBS's Humair said that compared to those that are offered by the ultra-rich segment, the high-net-worth business offers a better return on assets. He added that the bank already covered almost 90 percent in Hong Kong and three out of five billionaires in the region.

Many of UBS's global private banking rivals have raised their minimum wealth thresholds in the last couple of years to jump clear of rivals, with a host of local and regional banks crowding the low-and-mid-segment of the market.

A Standard Chartered spokeswoman said that in order to optimize resources, over the next two years, Standard Chartered's private banking business plans to raise the threshold from $2 million to at least $5 million.

Existing clients with assets of $2 million to $5 million would be continued to be served by the bank, she added.

Kin Asia, its target client segment was doubled to at least $10 million by JPMorgan last year.

Meanwhile, in the millionaire segment via acquisitions, regional banks including DBS Group have bolstered their presence. Record first-quarter profit for its wealth management business was reported by DBS, Singapore's biggest lender on Tuesday.

"I do believe we continue to gain share," DBS Group CEO Piyush Gupta said. "It's mostly from smaller players. I don't think we are gaining market share against UBS, for example. UBS continues to grow as fast, if not faster than we do."